Assume the President signs a stimulus package permitting businesses to expense $250,000 of equipment purchases in the
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Assume the President signs a stimulus package permitting businesses to expense $250,000 of equipment purchases in the current tax year, provided total equipment purchases do not exceed $750,000. Assume the ABC corporation purchased a machine for $500,000 during the qualifying time period. The machine has a 7-year MACRS life and a 10-year straight line write-off for financial accounting purposes.
a. What is the deferred tax liability balance for Years 1, 5, and 9, assuming a 35-percent marginal tax rate?
b. What is the journal entry to record the deferred tax benefit in Years 1, 5 and 9?
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
Posted Date: